Quickening the pace. Annual Report and Accounts 2013 Tarsus Group plc

Transcription

1 Quickening the pace Annual Report and Accounts 2013 Tarsus Group plc Year ended 31 st December 2013

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3 CONTENTS BUSINESS REVIEW 2 CHAIRMAN S AND MANAGING DIRECTOR S STATEMENT 6 FINANCIAL REVIEW 8 WHO WE ARE 10 HIGHLIGHTS 11 STRATEGY 14 WHAT S NEW BUSINESS REVIEW - KEY BRANDS 18 DUBAI AIRSHOW 20 LABELEXPO 22 AAITF - GZ AUTO 24 ZUCHEX 26 FLOWER SHOW TURKEY 27 ASANSOR 28 MEDICAL 29 OFF-PRICE 30 GESS 31 HEAVENT GOVERNANCE 32 BOARD OF DIRECTORS 34 CORPORATE SOCIAL RESPONSIBILTY 36 DIRECTORS REPORT 41 CORPORATE GOVERNANCE REPORT 44 NOMINATION COMMITTEE REPORT 45 AUDIT COMMITTEE REPORT 50 REMUNERATION COMMITTEE REPORT 69 DIRECTORS RESPONSIBILITIES STATEMENT FINANCIAL STATEMENTS 70 INDEPENDENT AUDITORS REPORT 75 CONSOLIDATED INCOME STATEMENT 76 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 77 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 78 CONSOLIDATED STATEMENT OF CASH FLOWS 79 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 81 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 113 TARSUS GROUP PLC - COMPANY INCOME STATEMENT 114 TARSUS GROUP PLC - COMPANY STATEMENT OF FINANCIAL POSITION 115 TARSUS GROUP PLC - COMPANY STATEMENT OF CASH FLOWS 116 TARSUS GROUP PLC - COMPANY STATEMENT OF CHANGES IN EQUITY 117 NOTES TO THE FINANCIAL STATEMENTS OF TARSUS GROUP PLC OTHER INFORMATION 121 SHAREHOLDER INFORMATION 1

4 BUSINESS REVIEW Chairman s and Managing Director s statement STRATEGIC OVERVIEW At the start of 2013 Tarsus launched the next phase of its growth strategy - Quickening the Pace. This followed the completion ahead of schedule of the Group s Project 50/13 target of deriving 50% of revenues from Emerging Markets by The core focus of the Quickening the Pace strategy is to accelerate financial returns to the Company s shareholders. This is being driven by a combination of geographical replications of major brands into fast growth economies; organic growth from the existing portfolio; tight cost control and selective small strategic acquisitions in the US and Emerging Markets which the Group believes will continue to outpace mature Western economies. During 2013, the Group made progress on all fronts. Visitor numbers at its key events showed strong increases; margins were maintained and the Group launched a number of replications of GZ Auto and Zuchex into new territories. FINANCIAL RESULTS Group revenues for the full year were strong at 75.9m (2012: 51.5m) and up 23% on a biennial basis (2011: 61.7m). Like-for-like revenues, excluding acquisitions and foreign exchange movements, increased by 11%. Group adjusted profit before tax was 24.2m (2012: 14.8m) and up 44% on a biennial basis (2011: 16.8m). Net interest expense rose to 1.5m (2012: 1.2m) reflecting increased debt levels across 2013 as a result of acquisitions completed. Reported profit before tax was 15.9m (2012: 8.4m). The Group incurred a number of one-off costs relating to acquisitions and the extension of the Group s banking facilities during the year. These costs, amounting to 1.4m, have been excluded from adjusted profits. Additionally, a 3.9m impairment has been booked against the carrying value of goodwill of some of the older French IT events and a 2.5m credit resulting from a reduction in put/ call option liabilities based on fair value movements. None of these adjustments have been included in the adjusted profit figure. The adjusted tax charge of 3.6m (2012: 2.2m) represents 15% (2012: 15%) of the Group s adjusted profit before tax. The reported tax charge is 2.7m (2012: 1.8m). The Group continues to focus on tax efficiency and generates nearly all of its profits outside of the UK, including markets with significantly lower tax rates. Adjusted earnings per share were 20.0p (2012: 12.2p), 18% up on a biennial basis (2011: 17.0p). Basic earnings per share for 2013 were 12.2p (2012: 5.6p). The Group generated 24.5m (2012: 12.2m) of cash from operations, an increase of 100% against 2011, the comparative biennial year (2011: 11.8m). Acquisition costs during the year were offset by the strong operational cash generation. The Group s net debt at 31 December 2013 was 28.6m (2012: 15.7m). The Board is proposing a final dividend of 5.0p per share, bringing the total for the year to 7.3p per share (2012: 6.8p per share), up 7%. The final dividend, subject to Shareholder approval, will be paid on 9 July 2014 to Shareholders on the Register of Members on 30 May A scrip dividend will continue to be offered as an alternative. CORPORATE ACTIVITY The Group made two small acquisitions during the year. In January 2013, it acquired 51% of Indonesian exhibition organiser PT Infrastructure Asia ( PTIA ) and in November 2013 it acquired 50% of two Mexican events from EJ Krause. These acquisitions, in two attractive markets, mean that the Group s desired geographical footprint is now substantially complete. Tarsus agreed in December 2013 to acquire 50% of China (Shenzhen) International Brand Underwear Fair ( SIUF ) in China, which runs the leading Asian show for underwear, to increase the percentage representation of China s economy in the Group s portfolio. Tarsus believes that SIUF will provide synergies with its US Off-Price business where lingerie is one of the largest categories. 2

5 BUSINESS REVIEW Geographical Analysis Emerging Markets ( m) Biennial revenue Annual revenue Total revenue Adjusted profit before tax US Europe Also in December 2013, the Group acquired the outstanding 25% of the issued share capital of Istanbul-based IFO having purchased the initial 75% in June IFO has shown strong growth under Tarsus ownership and the acquisition will further consolidate the Group s position in the fast-growing Turkish market. Early in 2014 the Group made two small acquisitions 60% of Komatek, which runs Turkey s leading construction event and 100% of the assets of HealthScienceMedia Inc. in the US which organises the Cardiometabolic Health Congress ( Cardio ). These moves extend the Group s existing construction portfolio into a dominant position in Ankara, Turkey and further accelerate the development of its highly successful Medical Division in the US. OPERATING REVIEW Emerging Markets Dubai The Group s major event of 2013 was the biennial Dubai Air Show in November which was held for the first time at a new purpose-built venue. The event was a great success for exhibitors who received world record customer orders of $206bn. The performance of the event was ahead of expectations with revenues 25% higher than the 2011 show coupled with strong rise in visitor numbers of 11% on a like-for-like basis. Earlier in the year, the education event GESS performed very well with excellent visitor attendance and revenues up 22%. Gulf Pack and Print also performed well in a difficult local commercial print market. Turkey The portfolio continued its impressive performance with like-for-like revenues increasing 13%. Zuchex (housewares and gifts) recorded a strong performance whilst Ideal Home (housewares and gifts) recorded revenues in line with expectations, its growth limited by venue constraints. Asansor (elevators) performed well with revenues up significantly on its previous edition. Yapi Decoor (decorative construction) held its first edition under Tarsus ownership in Ankara, performing slightly ahead of pre-acquisition expectations. REW (recycling, environment technologies and waste management) had its third edition under Tarsus ownership and again achieved revenue growth in line with management s expectations. The Group has launched a number of replications of Zuchex into new territories beginning with Jakarta in Indonesia in November

6 BUSINESS REVIEW 75.9m Revenue. (2011: 61.7million) 24.2m Adjusted profit before tax. (2011: 16.8 million) 20.0p Adjusted earnings per share (2011: 17.0p) 15% Adjusted effective tax rate (2011: 15%) 24.5m Cash flow from operations. (2011: 11.8 million) 7.3p Dividend per share. (2011: 6.3p) China Hope, the Group s Chinese joint venture, again performed well in 2013 with like-for-like revenues up 22%. Growth was driven primarily by a strong performance of the medical equipment portfolio in Central China. GZ Auto (auto aftermarket) had its first event under Tarsus ownership, following its purchase in late 2012, and delivered a very good result. This brand has been launched into other territories in 2014 including Indonesia and Thailand. Labelexpo Asia, in its tenth edition, saw visitor numbers up 19% and revenues up 11%. Indonesia PTIA owns and organises three annual exhibitions and one seminar series in Indonesia, providing Tarsus with an important hub in the fast growing Indonesian exhibition market. It will enable the Group to develop a range of infrastructure sector exhibitions and provide a platform with which to launch a number of new exhibitions drawing on Tarsus existing brands. PTIA held its infrastructure show in November 2013 which performed very strongly and is expected to benefit in 2014 from the joint venture with EJ Krause to run Expo Comm (information and communications) alongside it. Mexico In November 2013, the Group acquired 50% of two Mexican events from EJ Krause. These were Plastimagen, the leading event for the plastics industry in Mexico and Expo Manufactura, a leading event in metalworking and manufacturing. This joint venture provides a platform to launch Tarsus brands into Mexico and to expand EJ Krause s brands into Tarsus territories, beginning with Expo Comm in Jakarta in November US Medical Overall, the Medical division s revenues for the year were slightly ahead of the previous year. This division s 4

7 BUSINESS REVIEW The Dubai Airshow was a great success for exhibitors who received world record customer orders of $206bn. The performance of the event was ahead of expectations with revenues 25% higher than the 2011 show DOUGLAS EMSLIE, GROUP MANAGING DIRECTOR largest event was held in December 2013 in Las Vegas and performed well, with revenues up 24%. The Group is continuing to see a change in the mix of its education revenue streams with more being delivered online and a reduction in the volumes of on-site educational revenues. The Group s acquisition of Cardio in early 2014 compliments Tarsus existing Medical business and provides an established audience for the division s recently launched new mainstream product, the Metabolic Medicine Institute ( MMI ), in addition to a number of possible synergies with the Group s existing Medical division. Off-Price The February 2013 Off-Price show in Las Vegas was a record event and the 2013 August show also recorded good growth. Overall, revenues were up 4%. Europe Labelexpo Europe Labelexpo Europe took place in September 2013 in Brussels. It produced record increases of 11% in both like-for-like revenue and visitor attendance. As a result of this very strong event, re-bookings of 87% for the 2015 exhibition were secured. France Trading in the Group s French business ended the year broadly in line with the Board s expectations. The larger events were positive, held back by IT shows and directories. our continuing to invest in Tarsus market leading brands. Moves into Mexico and Indonesia in 2013 substantially complete the footprint of the geographical markets Tarsus is aiming to develop, whilst the Group s corporate activity in early 2014 will strengthen the portfolio and promote additional growth opportunities. In the US, the purchase Cardio and the launch of MMI in February 2014 will enhance the prospects for the Medical business as it moves progressively into the mainstream. Like-for-like bookings for 2014 are tracking 11% ahead of the equivalent time last year. Off-Price was held in Las Vegas in February 2014 with revenues in line with expectations. Owing to the incidence of large biennial events within the portfolio, profits generated in odd years are typically larger than those generated in even years. Adjusting for this biennial effect, the Group remains confident of delivering a good performance in 2014 on a constant currency basis. Neville Buch CHAIRMAN Douglas Emslie 4 March March 2014 GROUP MANAGING DIRECTOR In January 2014 the Group sold up to 18% of its French business for 1.5m to Romuald Gadrat, the incumbent Managing Director of the division who will continue to run the business. This is in line with the Group s strategy of reducing its exposure in France. OUTLOOK The Group s major events continue to go from strength to strength underlining the importance of 5

8 BUSINESS REVIEW Financial Review FINANCING AND NET ASSETS The geographical composition of Tarsus international event portfolio means that revenues and profits are generated in a range of currencies, principally US Dollars, Euros, Turkish Lira and Sterling. In 2013 approximately 49% of revenues were generated in US Dollars, 14% in Euros, 14% in Turkish Lira, 14% in Sterling and 8% in Chinese Renminbi. As a result, the Group s Sterling translated trading results are significantly affected by any changes in prevailing exchange rates during the year. The average exchange rates applicable for 2013 were: US$: a strengthening against Sterling of 1% compared with 2012 Euro: a strengthening against Sterling of 3% compared with 2012 Turkish Lira: a weakening against Sterling of 6% compared with budgeted exchange rates are US$: 1.65, Euro: 1.20 and Turkish Lira: CASH FLOWS Tarsus continues to generate strong cash flows from its operations. The larger events typically have a positive working capital cycle and the business in general has a low capital investment requirement. The biennial nature of the Group s event portfolio results in an increase in working capital (excluding cash) in odd years, including 2013, which include the two largest events. This occurs as previously deferred income relating to these is released from the balance sheet and recognised as income. During 2013, the Group generated 24.5m of cash from operations (2012: 12.2m). The key non-operating cash flows in 2013 included: Dividends paid of 6.3m Deferred consideration payments totalling 18.8m Tax and interest paid totalling 4.8m Acquisition of PTIA and EJ Krause 5.5m NET DEBT The Group s funding objective is to ensure that the business has sufficient resources, secured on competitive terms, to meet its various financial commitments as they arise. It achieves this objective by actively monitoring its cash flows and requirements on both an historic and forward looking basis. The Group is cautious in its approach, applying appropriate sensitivities to both the quantum and timing of its projections. Tarsus external bank debt facility was extended in November 2013 to 60m and is a multi-currency facility which is in place until September Where foreign currency borrowings do exist they are hedged using forward currency contracts. At 31 December % of all borrowings were denominated in Sterling with the remainder denominated in US dollars. The Group has entered into interest rate swaps to fix the interest rates payable under its banking facilities. The Group s net debt was 28.6m at 31 December 2013 (31 December 2012: 15.7m). NET ASSETS As at 31 December 2013, the Group had net assets of 40.2m (31 December 2012: 47.0m). INTANGIBLE ASSETS Intangible assets comprise goodwill, trademarks and customer lists. The carrying value of intangible assets at 31 December 2013 was 98.0m (31 December 2012: 102.6m). WORKING CAPITAL It is the Group s policy to recognise profits upon the completion of an event. Until completion, revenues and costs are held on the Statement of Financial Position. Included in net current liabilities as at 31 December 2013 is deferred income of 18.4m (2012: 25.3m). Prepaid event costs of 2.8m (2012: 2.5m) are included in trade and other receivables. 6

9 BUSINESS REVIEW Our Quickening the Pace strategy is delivering growth in profits, earnings and cash, leading to increased returns to shareholders DAN O BRIEN, GROUP FINANCE DIRECTOR ACQUISITIONS On 28 February 2013 the Company acquired 51% of the issued share capital of PTIA. On 26 November 2013 the Company acquired a 50% interest in a company that owns exhibitions in Mexico from E.J. Krause & Associates, Inc. ( EJK ) to establish a joint venture (the JV ) with EJK. On 18 December 2013 the Group agreed to acquire a 50% interest in the China (Shenzhen) International Brand Underwear Fair ( SIUF ). On 20 December 2013 the Group acquired the outstanding 25% of the issued share capital of Istanbul based IFO not already owned by Tarsus from Mr Selahattin Durak, a related party of the Company. The total consideration for the remaining 25% acquisition of IFO is capped at TL12.57m (approximately 3.7m) payable in cash. The Company purchased the initial 75% of IFO in June POST BALANCE SHEET EVENTS On 6 January 2014 the Company sold up to 18% of its French business to Romuald Gadrat, the incumbent Managing Director of the division and a related part of the Company, for 1.5m in cash. On 7 February 2014 the Company acquired 60% of SADA Uzmanlik Fuarlari A.S. ( SADA ) in Turkey. SADA organises a single event Komatek which is Turkey s largest trade exhibition for construction equipment and related products. On 10 February 2014 the Company acquired 100% of the assets of HealthScienceMedia Inc. in the US. The total consideration for the acquisition of the assets is US$14.0m in aggregate payable in cash. The Company also raised 10m (gross) through the placing of 5.0m new ordinary shares with existing and new investors on 10 February 2014 reducing the Company s gearing level following these acquisitions to be in-line with the Board s preferred and conservative target of 1.5 times net debt:ebitda. KEY PERFORMANCE INDICATORS The Group measures its performance using a number of financial and operational measures which are commented upon throughout the Operating Review. These financial measures principally include like-for-like revenue growth, adjusted profit before tax, adjusted EPS and dividend per share. The Group also focuses on the geographical and divisional composition of its business with the stated strategy of increasing the proportion of revenues from Emerging Markets and the US. Tarsus also has an operational target to grow the number of visitors attending its events by at least 5% per annum. Dan O Brien Group Finance Director 4 March 2014 KEY PERFORMANCE INDICATORS (2013) KPI Achieved Like-for-like revenue growth 11% Adjusted profit before tax 24.2m Adjusted EPS 20.0p Dividend per share 7.3p Proportion of revenue from 75% Emerging Markets and US Visitor Growth 8% 7

10 BUSINESS REVIEW Who we are TOP 10 BRANDS: 1 DUBAI AIRSHOW 2 LABELEXPO 3 AAITF (GZ AUTO) 4 ZUCHEX 5 ASANSOR 6 FLOWER SHOW 7 MEDICAL 8 OFF-PRICE 9 GESS 10 HEAVENT 24% USA 25% EUROPE PERCENTAGE OF GROUP REVENUE GENERATED IN % EMERGING MARKETS 8

11 BUSINESS REVIEW US: Tarsus owns three core brands in the USA in very different sectors medical, labels and discount clothing. Medical: In 2006 Tarsus acquired Medical Conferences International Inc (MCII), through which it owns and manages a global series of events and educational resources in the field of anti-aging and preventive medicine. The Group is unique in its provision of comprehensive, hands-on clinical training programmes and certification in the area of preventive, anti-aging, regenerative and functional medicine, delivering high level educational content through a combination of global conferences, exhibitions, workshops and a certified Fellowship Programme. Flagship events take place annually in Las Vegas and Orlando. Significant organic growth has been achieved through the launch of an e-learning platform which enables doctors to study the university-affiliated and professionally certified postgraduate courses online, opening up a significant new audience. On 7 February 2014 Tarsus acquired 100% of the assets of HealthScienceMedia Inc. which runs the Cardiometabolic Health Congress (Cardio) annually in Boston. This field of medicine, covering (among other things) obesity and type-2 diabetes, is of increasing interest, particularly in the US, and the show is the leading event in the field. The Group s acquisition of Cardio compliments Tarsus existing medical business and provides an established audience for the division s recently launched new mainstream product, the Metabolic Medicine Institute, in addition to a number of possible synergies with the Group s existing medical division. Labels: The Labels division runs the largest label converting event in the Americas. Launched in 1989, the Chicago-based event attracts in excess of 14,000 visitors and takes place in alternate years to Labelexo Europe. It is the premier Labels event serving the American and Latin American regions. Discount clothing: Tarsus has owned Off-Price, a series of market-leading exhibitions for the off-price (below wholesale) clothing and accessories industries in Las Vegas and New York, since This business, with its focus on value, has enjoyed particularly strong growth driven by an increase in demand for value goods and the proliferation of out-of-town shopping malls. Millions of dollars of business are transacted on-site at these events, which attract more than 12,000 attendees each and which take place twice a year as part of Las Vegas Fashion Week. EMERGING MARKETS: Tarsus has leveraged its strength in western markets to develop a strong portfolio in the higher growth emerging markets of the Middle East, Turkey, China, South East Asia, India, Indonesia and Central and South America. This has been achieved through a focused programme of organic growth and targeted acquisitions. Tarsus brands span a diverse range of sectors in these markets, including aerospace, labels, medical, lifts, housewares, recycling, signage, education, auto services, construction, infrastructure, clothing and travel. The portfolio includes leading events such as The Dubai Airshow the third largest aviation event in the world, Asansor, the fastest growing lift show in the world, Labelexpo, the global leader in Labels events and AAITF (GZ Auto) the largest auto after-market show in China and the second largest in the world. The focus on higher growth emerging economies is a key component of Tarsus growth strategy. Revenue from Emerging Markets now accounts for half of all Tarsus revenues (compared to one third three years ago). GDP growth in Turkey and South East Asia particularly Indonesia, China and Mexico - continues to exceed that in developed markets and provides further opportunities for premium growth. Tarsus is now well positioned to take advantage of these opportunities and Emerging Markets remain a key geography for the Group. EUROPE: France: Tarsus has a diverse portfolio of business services events in France - the second largest exhibition market in Europe. Alongside these events, Tarsus publishes a range of directories and online products. Sectors served include: IT, Marketing, Education, Facilities Management and Sustainable Development. In recent years, Tarsus has reduced its exposure to the slower growing European markets and in January 2014 sold up to 18% of its French business to management. This division now contributes less than 5% of group profits. Labels: The Labels division runs its largest event Labelexpo Europe - biennially in Brussels and produces a series of labels publications, including the market leading magazine, Labels & Labeling. 9

12 BUSINESS REVIEW Highlights STRONG ORGANIC GROWTH Like-for-like revenues up 11% OUTSTANDING PERFORMANCE IN DUBAI The Dubai Airshow broke all records with over 1000 exhibitors, over 60,000 visitors and a world record order book for exhibitors exceeding US$200 billion RECORD BREAKING PERFORMANCE Record breaking performance for Labelexpo Europe with revenues and visitor numbers both up 11%, and a rebook rate of 87% YEAR ON YEAR GROWTH Labelexpo Asia celebrated its 10th anniversary with an impressive 19% increase in visitors and a 11% increase in revenues REPLICATION INTO FAST GROWING MARKETS Homewares brand Zuchex was replicated into the Indonesian and Dubai markets with the first exhibitions in Jakarta in November 2014 and in Dubai January 2015 EXPANSION IN CHINA Presence in China extended with acquisition of 50% of the Shenzhen International Brand Underwear Fair (SIUF) OUTSTANDING GROWTH GZ Auto (China) achieved a record show with revenues up 23% and announced replications into new markets in Indonesia and Thailand STRONG FOOTHOLD SECURED IN MEXICO A foothold in the Mexican market was secured through a joint venture with EJ Krause, with two shows in plastics and manufacturing in 2014 and opportunities for replication in other markets EXPANSION IN INDONESIA Acquisition of 51% of Indonesian exhibition organiser, PTIA which runs Infrastructure Week. Revenues doubled on the first edition under Tarsus ownership 10

13 BUSINESS REVIEW Strategy CONNECTING BUYERS AND SELLERS Tarsus is focused on developing a business that facilitates relationships between buyers and sellers, helping them to do business in their respective markets efficiently and profitably. Exhibitions offer a unique and unparalleled proposition in their ability to provide face-to-face interaction, and are particularly resilient in emerging markets where personal relationships are so highly valued. The connections and networking that take place at trade shows are strengthened and reinforced by online interaction and education and through the provision of market-leading publications and thought leadership conferences. QUICKENING THE PACE 2013 has been a truly transformative year for Tarsus, with record-breaking performances across the board, the launch of new events in new territories and the acquisition of strategic events in new higher-growth markets. These substantially complete the footprint Tarsus set out to achieve as part of its objective to derive 50% of its revenues from emerging markets by Having successfully reshaped the Group s revenues, increasing exposure to markets which are experiencing high GDP growth, Tarsus is now actively building on these solid foundations and focusing on adding value and Quickening the Pace of growth. The Group launched its Quickening the Pace strategy at the start of 2013, accelerating the pace of financial returns to shareholders through a combination of geographical replication of major brands into fast growth economies, organic growth from the existing portfolio, tight cost control and selective strategic acquisitions in the US and emerging markets. Quickening the Pace will leverage fundamental changes underway in the world s economies, with growth in the US and selective Emerging Markets poised to further outpace the mature economies of the West. The exhibition markets in which Tarsus operates are now consolidating rapidly to the benefit of the companies that achieved early entry. Tarsus acquisition strategy deliberately focuses not only on markets in transition but on attaining marketleading brands which have scope for growth and internationalisation, enabling Tarsus to add value. In 2013, Tarsus continued to extend its emerging market portfolio through acquisitions, joint ventures, replications and launches in Mexico, Indonesia, China and Thailand. Tarsus is committed to accelerating the pace of financial returns to shareholders, growing international visitor and exhibitor numbers at each of its events and growing its businesses in Emerging Markets and the US. As an international exhibition organiser with a strong track record of running and replicating international exhibitions there are a number of key ways in which Tarsus can add value to achieve these aims. Growing international sales: With Tarsus long experience of growing exhibitions, it is uniquely positioned to expand the international exhibitor base through the introduction of its International Sales Force to support the local sales teams. This sales force is product-focused, developing deep industry knowledge and connections, and creating a layer of expertise which in turn facilitates the replication of events into new territories. Extending and replicating brands: Tarsus has a strong track record of successfully replicating its brands across the globe. The Labelexpo series under Tarsus ownership has grown from two Western events to a series of events in 12 countries, the majority of which are in Emerging Markets. Tarsus has the resources, expertise and connections (both local and global), successfully to replicate events into new territories. The Zuchex Housewares event, acquired in 2012, has already announced replicated editions in Indonesia 11

14 BUSINESS REVIEW in 2014 and Dubai in The auto-aftermarket event, AAITF, will also be replicated into Indonesia and Thailand in The Mexican joint venture with EJ Krause provides further opportunity to replicate key brands into Indonesia and other appropriate markets. The strong synergy between the newly acquired underwear event in China and our Off-Price business also generates significant opportunities for growth. Sales and marketing expertise: There are significant opportunities to increase market share organically in each of Tarsus core brands. The Dubai Airshow, AAITF and Zuchex have each seen excellent growth under Tarsus ownership and the continued sharing of expertise and deep sector knowledge provides significant scope for continued organic growth. WHAT TARSUS HAS ACHIEVED Since its inception over fifteen years ago, Tarsus has built a diverse portfolio of leading brands that span a wide range of industries and geographies. Tarsus has developed a solid international customer base whilst forging a strong presence in local markets and nurturing a loyal team with exceptional market knowledge. Built a leading portfolio in the higher growth emerging markets, which now contributes over half of Group revenues: With lower growth in more developed markets, Tarsus has sought out the high growth of emerging markets, successfully replicating key brands and making strategic acquisitions to build new revenue streams across a range of sectors and geographies. This table shows the key performance indicators of the Group s Quickening the Pace strategy in 2013 Quickening the pace - KPIs Target Achieved Accelerating earnings per share growth 5-10% pa 9% Increasing share of revenues from US and EM 75% 75% Visitor growth 5% 8% 12

15 BUSINESS REVIEW Established solid foundation for future growth: Having now established a strong foothold as the owners of a portfolio of world-class products in the emerging markets of China, Middle East, Turkey, India, Indonesia, Thailand, Brazil and Mexico, Tarsus is well positioned to leverage these assets as a platform for growth. Continued organic growth: Tarsus key brands are market leaders. They are robust and global and continue to gain momentum, leading their respective industries. Strong organic growth in exhibit sales continues to be supplemented by developing ancillary revenue opportunities such as conferences, educational programmes and online products. There is significant potential for organic expansion by adding new segments and where appropriate, collaborating with complementary events. KEY OPPORTUNITIES Having established a significant footprint in emerging markets and developed a diverse portfolio of products, Tarsus is focused on nurturing and leveraging these assets to generate growth. This will be achieved through i. Replication of existing brands into new markets Zuchex, GZ Auto and Expo Comm into Indonesia ii. Targeted strategic acquisitions in new highgrowth markets such as Indonesia and Mexico iii. Organic growth through a focus on international sales and the continued development of ancillary revenues particularly in the US medical division where the development of additional educational modules opens up access to a much broader audience thereby increasing revenue potential. Since 2009 Tarsus has significantly increased its revenue from the US and theemerging Markets. Tarsus is now building on these solid foundations and focusing on adding value to quicken the pace of growth. US & Emerging Markets revenue by location ( 000) 60,000 50,000 40,000 30,000 20,000 10, Proforma* US Middle East China Turkey Other Asia/South America *2013 Proforma revenue includes share of joint venture revenues and revenues from businesses acquired in late 2013 and early

16 BUSINESS REVIEW What s new MEXICO 2 BANGKOK 3 SHENZHEN 4 JAKARTA Plastimagen Expo Manufactura GZ Auto SIUF GZ Auto Indonesia Expo Comm Zuchex Labels 14

17 BUSINESS REVIEW 2013 has seen Tarsus futher develop its international portfolio of market leading events in fast-growing emerging markets. This section spotlights some of the new acquisitions, launches and joint ventures in CHINA Tarsus first established a presence in China in 2005 with the launch of Labelexpo Asia (which this year celebrated its 10th anniversary with a strong performance and revenues up 10%). Tarsus added a portfolio of events in a diverse range of sectors with the acquisition of Hope in 2007 and GZ Auto in In December 2013, Tarsus added further scale and diversity to its Chinese operations with the acquisition of 50% of the Shenzhen International Brand Underwear Fair (SIUF). SIUF is the leading underwear show in China, bringing together wholesalers and manufacturers of lingerie, swimwear, brand underwear and underwear accessories with the retailers, importers and exporters operating in this sector. Occupying over 58,000 sqm (gross), the event takes place each May at the Shenzhen Convention and Exhibition Centre and welcomes over 40,000 trade visitors and 500 exhibitors. The global underwear market is valued at circa US$30 billion, with growth concentrated in emerging markets where a burgeoning middle class, adoption of western fashion trends and a higher youth population are expanding the sector. China s underwear market was valued at US$10 billion in 2010 and is the fastest growing underwear market in the world. With 10,000 manufacturers across mainland China, the Yangtze and Pearl River Deltas, the core of the show is domestic Chinese underwear brands. Internationalising the event will be a key target and further growth will be achieved by expanding existing and new segments and launching a co-located sourcing event for lingerie manufacturers. The event also has potential synergy with the US Off-Price business, creating opportunities for new co-located events in that market. The acquisition fits in perfectly with Tarsus Quickening the Pace strategy as it is both a leading show and immediately earnings enhancing TURKEY In 2011, Tarsus acquired 75% of leading Turkish exhibition organiser IFO, to provide an initial platform in this fast-growing and strategically important market. A 70% stake in Life Media, which organises leading homewares events and a 75% stake in CYF which organises construction events followed shortly after in saw the acquisition of the remaining 25% of IFO while early in 2014 Tarsus acquired 60% of the Ankara-based show Komatek - the leading construction equiptment event in Turkey. As a result of these transactions, Tarsus is now one of the largest international exhibition organiser in Turkey. In 2013, Tarsus Turkish portfolio covered some 108,000 net sqm and attracted almost 130,000 trade visitors. Like-for-like revenues across the seven shows held this year was up 13% overall. FRANCE Tarsus continues to reduce its exposure to the slower growing European market and 2013 saw the disposal of up to 18% of Tarsus French business to the Managing Director of the division, Romuald Gadrat. MEXICO Tarsus currently runs a Labels Summit in South America, which alternates biennially between Mexico and Brazil. This year, Tarsus substantially increased its Central and South American presence by entering into a joint venture with EJ Krause in Mexico, thereby increasing its exposure to a territory with strong growth potential. The JV will operate two exhibitions; Plastimagen which serves the plastics market, and Expo Manufactura which serves the metalworking and manufacturing sectors. Plastimagen is the leading exhibition in the plastics 15

18 BUSINESS REVIEW industry in Mexico and focuses on plastic processing and ancillary equipment. The event is targeted at engineering and production professionals from plastic processing, packaging and manufacturing companies. Occupying over 17,000 sqm net space at Centro Banamex, Mexico City, the event runs on an 18 month cycle with the next edition taking place in November Almost 30,000 trade visitors and over 780 exhibitors participated in the 2013 event, which was the 18th edition. Expo Manufactura is Mexico s premier metalworking and manufacturing exhibition, bringing together the latest in manufacturing technology including the latest machine tools, assembly technology, fabricating software and welding technologies. Visitors to the event are production and engineering professionals from across the manufacturing industries including automotive, aerospace, electrical appliances and medical devices. The 17th edition, which took place in February 2013, attracted over 9,000 visitors from 23 countries and occupied over 10,000 sq metres. 350 exhibitors representing 600 brands participated in the event. INDONESIA AAITF Indonesia Tarsus acquired the Chinese Auto Aftermarket event - AAITF (GZ Auto) in 2012 and has partnered with local Indonesian organisers, Dyandra Promosindo, to launch an event into the fast growing automotive aftermarket in Indonesia. With car sales approaching 1 million units per year, and growth forecasts of up to 50% predicted in the next five years, Indonesia is set to become a critically important market for global automotive aftermarket suppliers. The 2014 event will co-locate with the Indonesian Motor Show - which Dyandra already operates - and will occupy almost 4,000 sqm at the Jakarta International Expo, showcasing more than 170 largely international companies. AAITF Jakarta will quickly become the definitive platform for the Indonesian automotive aftermarket. Indonesia Infrastructure Week In January 2013 Tarsus acquired a 51% stake in Indonesian exhibition organiser PT Infrastructure Asia (PTIA). PTIA owns and organises the leading Indonesian exhibitions in the infrastructure and telecoms, media and IT sectors. These events were rebranded in 2013 under the umbrella event name, Indonesia Infrastructure Week (IIW), to bring together the infrastructure and construction community and to build industries and partnerships that can deliver Indonesia s critical national infrastructure. IIW co-locates a series of key events including the Regional Governments Conference, Connect Indonesia (telecoms) Green Airports Indonesia (airport infrastructure) Konstruksi Indonesia (construction) and the Indonesia International Infrastructure Conference and Exhibition. Held at the Jakarta Convention Centre in November, the annual event attracted 131 exhibitors. Occupying 4,650 sqm, exhibitor sectors covered included manufacturing, energy and renewables, bank and financing, railways, construction supply chains, heavy equipment, mechanical engineering and information technology. With over US$50 billion of infrastructure projects in progress in Indonesia and a further US$180 billion in the pipeline, this is a rapidly developing market and IIW is widely recognised as the premium platform for stakeholders to showcase their projects and capabilities and to participate in developing the nation s critical infrastructure. EXPO COMM As part of its joint venture with EJ Krause in Mexico, Tarsus will also launch an edition of Expo Comm in Jakarta in November Expo Comm is an ICT exhibition with a global schedule of events in Latin America, Europe, and Asia. It covers telecommunications, broadband, wireless 3G/4G, unified communications and network infrastructure an area of considerable growth as Indonesia rapidly emerges as a modern economy. 16

19 BUSINESS REVIEW LABELEXPO In 2013, the Labels Group launched a Summit event into Bali, Indonesia to help international printers and converters gain a foothold in this fast moving market. Over 200 delegates from Indonesia, the Philippines, Australasia and Malaysia attended the event which will alternate between Bali and Jakarta each year. The Bali event was heralded a great success and consequently the Jakarta event will be extended to add heavy machinery demonstrations and a full exhibition alongside the conference. ZUCHEX The homewares market in Indonesia is growing apace - a growing middle class and a boom in home ownership and consumer spending provide a massive potential marketplace for sales in this sector. As a result, Tarsus has launched Zuchex Indonesia 2014, managed by Life Media who operate the Turkish Zuchex exhibitions, and with the support of Tarsus international sales force. The event will take place at the Jakarta Convention Centre in November THAILAND AAITF Bangkok will take place in December 2014 at the Impact Challenger Exhibition Centre alongside the principle automotive event for Thailand the Thailand International Motor Expo. The show will be operated as a joint venture with the organisers Inter-Media Consultants. The Motor Expo draws in excess of 1.6 million visitors, many of whom will be keen to source new and innovative aftermarket brands and products. The automotive industry in Thailand is experiencing high growth, with 1.3 million units produced in the first half of 2013 according to the Federation of Thai Industries and the sector contributes around 12% of GDP, making it Thailand s third largest industry. 17

20 BUSINESS REVIEW - KEY BRANDS Dubai Airshow The Dubai Airshow, the global aviation event, widely acknowledged as one of the most important aerospace events in the world, is the flagship event of Tarsus Middle East office. The event is run by F&E Aerospace, which was acquired by Tarsus in 2007 and is recognised as one of the most influential names in the Middle East events sector. The Aerospace industry in the Middle East continues to enjoy strong growth as the United Arab Emirates positions itself not only as a centre of tourism and commerce, but also as a global long-haul aviation hub. It is anticipated that some US$400 billion will be invested in Middle Eastern airlines and airports in the next few years and the economic contribution of the aviation sector is set to rise to US$44.5 billion (or 32% of Dubai s GDP) and to represent approximately 22 % of its employment by Buying power in this sector has shifted to the Middle East and Asia due to the rapid growth in these regions. Indeed the UAE is now home to two of the fastest growing airlines in the world, while Dubai International Airport saw an increase of 14% in passenger throughput last year which is predicted to top 90 million in the next five years. Boeing forecasts that, in the next two decades, airlines in the Middle East will require an estimated US$550 billion of new airplanes. The 2013 event proved this beyond doubt. Never before have orders of this magnitude US$206 billion - been made at any other aerospace event. Taking place for the first time at the newly built Dubai World Central Aerotropolis, the show occupied over 645,000 square metres double its previous space - and welcomed over 18

21 BUSINESS REVIEW - KEY BRANDS Dubai 2013 has been a truly historic and record-breaking airshow for The Boeing Company. We would like to thank our hosts for the organisation of such a momentous event at the stunning new airshow venue. Charlie Miller, VP International Corporate Communications, Boeing 1,000 exhibitors from 60 countries. Event revenues grew by 25% compared to the previous edition and 60,692 visitors attended the event, smashing the previous edition s 22- year record by 11%. Over 1,700 representatives of local and international media were present, an impressive 163 static aircraft were on display, and the highly esteemed delegation programme delivered military and civil delegations from around the world. A number of record-breaking orders were placed at the show and strategic partnerships announced. Aircraft manufacturer Boeing used the event to launch its new 777X series, billed as the world s largest and most efficient twinengine jetliner. Deals announced by Boeing at the Dubai Airshow, amounting to US$95 billion, made the 777x the highest value product launch in commercial jetliner history. Emirates Airline themselves made history by making the single biggest order ever placed with Boeing at a show. Rolls Royce revealed a strategic partnership with the UAE government owned Mubadala Aerospace to service its Trent XWB engines, and manufacturer Bombardier secured deals with other MENA region airlines including Iraqi Airways and Air Côte d Ivoire. New initiatives this year included the Skyview grandstand area which was open to the general public, giving thousands of people a spectacular view of the world s best flying displays. The show also saw the return of the Gulf Aviation Training Event a two-day conference taking place at the Airshow with its own dedicated pavilion in the exhibition hall addressing the crucial need for more aviation personnel in the region. Following on from the record breaking Airshow, Dubai was confirmed a few days later as the host city for the World Expo in With over 25 million visitors expected to descend on Dubai for the event, this promises huge opportunities for the Emirate including further development of the area where the Dubai Airshow is now held. 19

22 BUSINESS REVIEW - KEY BRANDS Labelexpo Labelexpo has been under Tarsus ownership since Tarsus grew and successfully replicated the Labelexpo exhibitions to create the Labelexpo Global Series, with leading exhibitions in Europe, America, India and Asia and educational Summits in Latin America, South Africa and (in 2013) Indonesia. Alongside the exhibitions, this division publishes a series of label publications, including the industry s only dedicated global label media outlet - Labels & Labeling magazine. The Labelexpo Global Series connects manufacturers of label printing presses and associated label printing components with printers and converters across the globe. More importantly Labelexpo events showcase the latest working machinery and materials for the labels industry, providing an important platform for manufacturers to launch new products to the market place. The global marketplace for labels and packaging has undergone significant change in recent years, for printers and brand owners alike. Print quantities are decreasing, label variations are increasing and the demand for label personalisation from brand owners is growing. Converters are diversifying their business beyond the label by moving into package printing which uses the same presses and materials. More emphasis is being placed on business efficiency without compromised quality and in turn printers and converters are looking for new and effective technologies and systems such as digital printing to protect and grow their business. The Labelexpo events and sister publications have great influence and are widely regarded as excellent barometers for what is really happening in the market place, as they keep abreast of the latest available technologies and emerging trends. The Labels division has strategically We were delighted by Labelexpo Europe 2013; our visitors were up 60% on the 2011 show, helped by the Inkjet Trail. It is also good to see the Labelexpo team continuing to innovate and refresh the visitor experience. Philip Easton, Domino 20

23 BUSINESS REVIEW - KEY BRANDS moved to reflect these market developments with new interests in commercial and package printing. This division has enjoyed sustained growth and 2013 has been no exception, with a very strong performance across the board. The Labelexpo team not only won the Marketing Campaign of the Year for an unprecedented fourth time, but also scooped the coveted Organiser Team of the Year at the AEO Awards. Labelexpo Europe 2013 was the largest-ever edition with a record-breaking attendance of 31,795 (an 11% increase on the 2011 event) and 600 exhibitors (up from 550 in 2011). The event occupied 31,000 sqm - the largest show floor size in the event s 33-year history and secured an onsite rebook rate of 86% for the 2015 event, an unprecedented result. Over 150 new products were unveiled at the event and exhibitor and visitor feedback was extremely positive. Further east, Labelexpo Asia celebrated its tenth anniversary edition with a record-breaking attendance of over 21,000 visitors (a 19% increase on 2011). With almost 300 exhibitors the event, which takes place biennially in Shanghai, occupied 8,000 sqm and managed its highest ever rebook with 50% of space already confirmed for This is highly unusual for an Asian exhibition. Gulf Print & Pack, the only dedicated commercial and package printing exhibition for the Middle East and North Africa region, takes place biennially in Dubai and drew 9,408 visitors from 93 countries - almost 15% up on the previous edition. Exhibitors secured significant sales and new business leads, with one brand estimating leads to be in excess of US$5million. The leading Label Summit series continued, with Summits taking place in Sao Paulo and (for the first time) in Indonesia. With 600 and over 250 delegates respectively, the Summits provide an opportunity for cost effective entry into new, high-growth markets s launch of Label Summit Indonesia was geared to explore new opportunities in the South East Asian and Australasian markets. Delegates from Indonesia, the Philippines, New Zealand, Australia, Singapore and Malaysia attended the event, which will alternate between Bali and Jakarta each year. It was also announced that Label Summit Latin America would be held in Colombia for the first time in

24 BUSINESS REVIEW - KEY BRANDS AAITF - GZ AUTO AAITF The Automotive Aftermarket Industry and Tuning Trade Fair, is a leading business to business automotive aftermarket exhibition in China. Now in its 10th year, AAITF takes place each February in Guangzhou and has quickly established itself as one of the world s largest and most influential auto aftermarket events. This event is operated as a joint venture between Tarsus and a local organiser, Jiuzhou Media. Jiuzhou Media is a leading publisher and renowned exhibition organiser in China, which publishes monthly magazines and websites in the auto aftermarket industry and has been established for over 20 years. AAITF showcases manufacturers from the full range of auto after-care products including car electronics, car audio and visual products, car decoration, car care and beauty products, car modification products and the full gamut of auto parts. Visitors are distributers, retailers, wholesalers, and salesroom, service and sparepart dealers from across China, Asia, and overseas. China s automotive aftermarket is expected to be the world s largest by 2015 with a sales value estimated at US$200 billion. Rising disposable incomes and 22

25 BUSINESS REVIEW - KEY BRANDS encouragement from the Chinese government for the urban population to obtain driving licences has spurred demand for passenger vehicles, which in turn has led to a surge in demand for automotive components. Exports are also an area of high growth. China Association Automobile Manufacturers (CAAM) predicts the auto industry in China will continue to grow by 13 to 15% each year. AAITF is well positioned to capitalise on this rapid growth. Supported by the leading auto associations in China, the event has enjoyed strong growth since its launch in 2006 with 300 exhibitors, rising to over 3,500 exhibitors in Strategically located in Guangzhou, a recognised manufacturing and trading hub with excellent links to the rest of China, Hong Kong and South East Asia, the event attracts a strong international exhibitor base and a growing international audience. The 2013 edition attracted thousands of visitors from 25 countries. Over 3,500 exhibitors participated, between them exhibiting some 20,000 new products. The event includes the China Auto Dealer Annual Conference, the EMMA Car Audio Awards, a full programme of seminars and workshops and a hosted buyer programme. As part of Tarsus Quickening The Pace strategy, the AAITF brand has been replicated to launch two new events in South East Asia in 2014; AAITF Jakarta and AAITF Bangkok. These new launch events will further cement AAITF s position as the world s leading automotive aftermarket trade-show. 23

26 BUSINESS REVIEW - KEY BRANDS Zuchex Zuchex is Turkey s market leading housewares and gifts exhibition. It is one of Turkey s largest trade fairs and is the third largest homewares exhibition in the world. Zuchex joined the Tarsus portfolio in 2012 when Tarsus acquired a 70% stake in Life Media to add further scale and diversity to its business in Turkey. Life Media was established in 1997 and owns two annual exhibitions in Istanbul Zuchex and Ideal Home Fair - in addition to publishing related Turkish and English language trade journals. The acquisition of Life Media coupled with the earlier acquisitions of IFO and CYF means that Tarsus is now the third largest international exhibition business in Turkey. Zuchex, which is actively supported by the Turkish Houseware Association, connects manufacturers and suppliers of housewares, homestyle, gifts and electrical appliances, with retailers and distributors from the region s gift and housewares sector. Homeware is a high growth sector in Turkey; in 2012 it was estimated to be worth US$585 billion. An increase in disposable incomes coupled with an increase in home ownership has driven greater sales of household products and gifts in recent years, both individual and corporate. In I think that the Zuchex Fair is the most important fair related to the Housewares sector in Turkey. We have had a large number of visitors from Europe, the Balkans and Middle East. Not only is Zuchex the place to do business, but it s also a communication platform for the sector. We get a chance to talk and learn others ideas about our own products and the future of the market Unal Demir, Chairman of the Board, Sanat Toprak. 24

27 BUSINESS REVIEW - KEY BRANDS addition, the retail sector in Turkey is becoming more organised, with more efficient supply chain solutions, which in turn are creating greater product innovation, accessibility and convenience, further buoying this market. The growth of tourism has also injected growth into the gifts sector, with an increase in demand for Turkish themed products. Serving this rapidly growing market, both Zuchex and the Ideal Home event enjoyed substantial growth in The 24th edition of Zuchex welcomed a record-breaking 33,000 visitors and over 580 exhibitors and occupied a total area of 98,000 sqm, making it one of the largest shows in Turkey. As part of Tarsus Quickening the Pace strategy, the Zuchex brand has been replicated to launch Zuchex Indonesia

28 BUSINESS REVIEW - KEY BRANDS Flower Show Turkey The Flower Show, also known as the Eurasia Plant Fair, is the region s largest horticultural and landscaping trade fair. Taking place annually in Istanbul in December, this event brings together buyers and sellers dedicated to indoor and outdoor ornamental plants, cut flowers, seeds, soils, plant care products, horticulture technologies and landscaping services. The Flower Show is owned and managed by CYF, who also run an annual construction materials and building renewal event in Ankara, Turkey. Tarsus acquired a 70% stake in CYF in 2012, to add further scale and diversity to its business in Turkey where it also owns exhibitions in a variety of sectors through its acquisitions of IFO in 2011 and of Life Media in The ornamental plants, landscaping and cut flowers market has enjoyed strong growth in Turkey in recent years, driven by three key factors: a rise in large scale municipal, commercial and residential developments in Turkey and surrounding regions; the emergence of Turkey as both an importer and exporter of ornamental plants and flowers and, finally, an increase in disposable income levels, creating a rise in domestic consumption. Exports of ornamental plants from Turkey are targeted to grow tenfold by 2023 and Istanbul is focusing on developing its role as a regional centre for the floriculture and horticulture sectors, thereby providing a marketplace for the emerging markets of Eurasia, CIS and the Balkans. The Flower Show is ideally positioned to take advantage of these developments. Since its relocation to Istanbul in 2011, the Flower Show Turkey, which launched in 2009, has enjoyed strong growth with exhibitor numbers tripling in two years and visitor numbers reaching almost 10,000 from 43 countries. 286 exhibitors from 21 countries participated in 2013 and occupied all available space at the Istanbul Exhibition Centre. Exhibitors reported strong sales leads, with enquiries from national and international construction and landscaping project companies, hotels and leisure facilities, wholesalers, retailers and estate management companies. Each year, there is a growing interest in the Flower Show Turkey. We were very satisfied with the numbers and quality of visitors and appreciate the opportunity to establish new contacts - particularly from the international plants businesses. Nesrin Otuzoğlu, Adaplant 26

29 BUSINESS REVIEW - KEY BRANDS Asansor Asansor, which joined the Tarsus portfolio as part of the IFO acquisition in 2011, is Eurasia s premier lift and escalator trade fair, taking place biennially in Istanbul in April. This event, which is now preparing for its 14th edition, connects lift component manufacturers, suppliers and lift installation companies with architects, surveyors, engineers, lift installation companies, contractors and building managers from across the globe. Lift manufacturing in Turkey has grown significantly in recent years. The Turkish lifting and handling equipment market alone was worth US$1.7billion in 2011, a growth of 900% in little over a decade. In 2012, the industry completed 18,000 lift installations, making Turkey the most active installation market in Europe. In addition, Turkey is rapidly establishing itself internationally as a compelling alternative to Chinese and European manufacturers. Turkey provides international buyers with an optimum blend of high quality products at low prices, with which Europe and China cannot compete.. Consequently, Turkish manufacturers enjoy a strong export market, with annual exports valued at US$400 million, particularly to Russia, CIS and Iraq. Asansor is the leading event to connect with buyers from these markets. edition) and over 26,000 visitors (up 10%). The event generated a 31% increase in revenues compared to the previous edition. In addition to the core lift and elevator products, new trends were also to the fore at this year s event, which saw innovations in safety and security, access solutions for the disabled, in-lift visual communication applications and more focus on design where technology meets aesthetics. Feedback from the visitors confirmed the high value they place on being able to view and compare this wide cross-section of products and services. Legislative changes in the EU, including safety and disability regulations, are significant growth-drivers, as is the strong market for maintenance, repair and replacement in Turkey and an increase in high-rise construction. The 2013 edition of Asansor was the biggest and most successful yet, occupying 30,000 sqm gross space and attracting 390 exhibitors (a 32% increase on the previous 27

30 BUSINESS REVIEW - KEY BRANDS Medical Tarsus Medical Division, MCII, owns and manages global events and education programmes in the field of anti-aging and preventative medicine. MCII works in partnership with the American Academy of Anti-Aging Medicine (A4M), which is the world s largest nonprofit scientific society of physicians and scientists dedicated to the advancement of technology to detect, prevent and treat aging-related disease and to promote research into methods to slow the aging process. A4M is a globally recognised purveyor of training programmes and certification, delivering high level educational content through a combination of live conferences, exhibitions, workshops and a certified Fellowship Programme. The global anti-aging products and services market is predicted to be worth over $274 billion in million Americans use anti-aging products and the industry makes an estimated $80 billion each year in the USA. MCII and A4M have firmly established themselves as the leading providers for education in this fast growing sector. Board certification exams, continuing medical education conferences and live fellowship modules take place throughout the year across the globe with two flagship events each year in Orlando and Las Vegas; Now on its 21st edition, the Las Vegas event also welcomed special guest Governor Arnold Schwarzenegger, who accepted the A4M Infinity Award for his role in funding and support of stem cell research and healthcare reform. The event featured the industry s highest-profile speakers including bestselling author and TV personality Dr Suzanne Somers, Dr Travis Stork (Emergency RoomPhysician and host of the Emmy award winning talk show The Doctors ) and leading author Dr Judith Reichman. There is significant demand for evidence-based education in preventative medicine, and healthcare is fast changing from treating diseases to preventing diseases - which is at the core of MCII s educational philosophy. This has led MCII to broaden its educational offering with the launch of a new brand - the Metabolic Medical Institute, Inc. (MMI). MMI offers medical education that focuses on integrative and preventative medicine which is geared towards a different audience consisting of more mainstream or traditional practice physicians. The introduction of this new brand, combined with the success of MCII s online learning platform (which launched in 2010 and enables doctors to study the Fellowship and Graduate Certificate course material online), opens up a significant new audience by making the educational programmes accessible globally and appealing to a broader range of medical professionals. The acquisition of the Cardio-Metabolic Health Congress (Cardio), in early 2014 furthers this strategy. The management of cardiometabolic diseases, including obesity and type-2 diabetes, is a field of increasing interest for both practitioners and pharmaceutical/biotechnology companies, especially in the US. The combination of CMHC and MMI offers a substantial growth opportunity by appealing to a more mainstream medical audience in a rapidly growing field. 28

31 BUSINESS REVIEW - KEY BRANDS Off-Price Off-Price is the leading brand in the US for apparel, accessories, footwear and jewellery, offering goods at 20-70% below wholesale prices. The Off-Price exhibitions, now on their 38th edition, connect buyers and sellers in the discount clothing and accessories markets. Exhibitors are represented by jobbers, importers and wholesalers. Buyers include the largest discount retail chains as well as department stores and individual boutiques. The exhibitions, which are unique to the USA, take place twice a year as part of Las Vegas Fashion Week and are order-writing events, which means that retailers visit the show, choose their products and place their orders at the exhibition, receiving and selling the goods at their stores within just a few weeks. Off-Price also holds an annual event in New York during the City s Market Week, which this year attracted 1000 visitors and 65 exhibitors. Off-Price has grown dramatically since Tarsus first acquired ownership in 1999 as a result of significant growth in the discount retailing market in America and a proliferation of out-of-town shopping malls. An uncertain economic climate has contributed to a growth in appetite for value goods and it is thought that 40% of clothes purchased in the US are now discount clothing items. In recent years, the Off-Price events have added new sectors including footwear, swimwear, accessories and jewellery, in addition to a growing cash and carry section. The 2013 Las Vegas event in February saw a 6% increase in attendance compared to 2012 and welcomed more than 500 exhibitors. At 131,000 square feet and with over 11,000 attendees the event was the biggest edition yet. The August Las Vegas event was also hailed a success, with 125,000 net square feet of space and over 10,000 buyers. We ve been doing this show for 12 years and this was our best show to date. We expanded from two booths last August to six booths because of expectations, and we met or exceeded all of those at this show. Joe Angers, Ultimate Apparel 29

32 BUSINESS REVIEW - KEY BRANDS GESS Gulf Educational Supplies and Solutions (GESS) is now in its seventh year and has firmly established itself as the Middle East s leading educational supplies show. GESS connects education professionals with providers of ICTand e-learning solutions, interactive technologies and scientific and laboratory equipment. The event runs alongside the Global Education Forum (GEF) which provides a platform for dialogue between the local academic and regional educational practitioners and their counterparts from the global education community. GESS and GEF are organised under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates and Ruler of Dubai, and supported by His Excellency Humaid Moh d Al Qutami, Minister of Education for the United Arab Emirates. Education is a major growth sector across the Middle East. According to data from the World Bank, public expenditure on education in the Middle East and North Africa stands at 22% of total government spending. In 2013, the UAE spent over US$2.6 billion on education and Qatar allocated over US$6 billion whilst Saudi Arabia has tripled its education budget since 2000, allocating US$54 billion to education and training in Oman invested over US$3 billion in education in 2013 (a 25% increase from 2012). Growth of this event is also driven by an emerging focus on integrating technology into the learning environment, with exhibitors seeking to showcase their new, innovative and fast-changing technologies to the education community. GESS receives overwhelming regional support with pavilions from the Ministries of Education for UAE, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman as well as representation from the Abu Dhabi Education Council and the Arab Bureau of Education from the Gulf States. This year s event was a great success. With a theme of Smart Learning and Technological Advances in Education, visitor numbers increased to over 7000 and over 300 exhibitors from 65 countries participated. There is no doubt GESS provides an excellent platform for suppliers and decision makers to meet. What has also worked for the show is the strong support shown by the government, in particular the visit of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, which tells the world how important education is in this part of the world Reinhard Koslitz, Executive Director, Didacta 30

33 BUSINESS REVIEW - KEY BRANDS Heavent Heavent is Europe s market leading trade show for the events industry. Now in its twelfth year, Heavent, which takes place in Paris, connects creative and technical suppliers with event organisers, agencies and corporates looking to organise events. Heavent serves the full spectrum of the events industry from exhibitions, conferences and meetings to large-scale outdoor events, festivals, concerts, weddings and sports events. Heavent is Europe s market leading trade show for the events industry. Now in its twelfth year, Heavent, which takes place in Paris, connects creative and technical suppliers with event organisers, agencies and corporates looking to organise events. Heavent serves the full spectrum of the events industry from exhibitions, conferences and meetings to large-scale outdoor events, festivals, concerts, weddings and sports events. Heavent 2013 occupied over 21,000m of gross space and combined a packed exhibition hall with a series of market leading conferences, debates, workshops, awards, web TV and entertainment. The event drew 17,868 visitors- an increase of 5.5% - and almost 365 exhibitors despite a turbulent market over 5600 scheduled meetings took place with visitors from across Europe, including a VIP-hosted buyer programme of participants from the leading 250 European event organizers. Heavent continues to innovate to ensure it remains the must-attend event, and in 2013 it ran the first edition of Venus Awards 8 industry awards recognising innovation. Heavent also includes two complementary events developed to extend its reach a business gifts exhibition Affaire de Cadeaux and an exhibition dedicated to the organization of seminars and congresses Seminaire Expo in addition to the online directory site Salledeseminaire.com Building on the success of this event, Heavent Meetings was launched in Cannes. This is a targeted and focused meetings-only event which connects buyers and sellers together for an intensive two days of pre-scheduled meetings and networking events. In 31

34 GOVERANCE - THE BOARD OF DIRECTORS The Board of Directors EXECUTIVE DIRECTORS NEVILLE BUCH BSC (67) (Chairman) founded the Group when it launched in He was previously Executive Chairman of Blenheim Group plc, a leading international exhibition, publishing and conference company which was acquired by United Business Media plc for 593 million in DOUGLAS EMSLIE BACC (HONS) CA (47) (Group Managing Director) joined the Group when it launched in 1998 as Finance Director, becoming Group Managing Director in Prior to joining the Group he held senior management positions at Blenheim Group plc and after its takeover, United Business Media plc. He is past Chairman and remains a Director of both the Association of Event Organisers and the Events Industry Alliance. He recently became the first international board member of the US industry trade body - SISO. DAN O BRIEN MA ACA (46) (Group Finance Director) joined the Group in July Since qualifying as a Chartered Accountant with Deloitte in 1991 he has held the role of CFO at TV production company Shine Group and at the listed B2B publisher Huveaux plc. He also held senior finance roles at Hanson plc, computer games company Eidos and Digital Theatre. GARY MARSHALL FCA (56) (Chief Executive Officer Asia) joined the Group in March 2010 to lead the Group s operations in Asia. Gary spent 11 years at United Business Media ( UBM ) where for six years he was CEO of their Asian B2B business. He left UBM in 2005 and then joined IDG Inc., the world s leading technology media, events and research company, as Director of International Business Development. At IDG he focused primarily on building their Asian and Middle Eastern businesses. 32

35 GOVERANCE - THE BOARD OF DIRECTORS NON-EXECUTIVE DIRECTORS ROBERT WARE BA (59) (Non Executive Director) joined the Group in February He was a director of MEPC Limited ( MEPC ) until June Initially Corporate Development Director, he was appointed Deputy Chief Executive in May In 2003 he left MEPC and listed The Conygar Investment Company PLC, an AIM-listed company of which he is the Chief Executive. He is also Chairman of Marwyn Value Investors Limited, Terra Catalyst Fund and Marwyn Management Partners Limited. HUGH SCRIMGEOUR BA FCA (61) (Non Executive Director) joined the Group in March Between 1993 and 1999 he was Chairman and Managing Director of Earls Court and Olympia, a major London events venue and exhibition organiser. He is Vice Chairman of Intex Shanghai, an exhibition company based in China and Chairman of an exhibition venue in central China, Zhengzhou International Convention and Exhibition Centre. He is a non-executive Director of Snoozebox Holdings Plc and a Fellow of the Institute of Chartered Accountants. PAUL KEENAN FCA (52) (Non Executive Director) joined the Group in December He is Managing Director of Capnua Limited, a corporate finance firm based in Dublin specialising in mergers, acquisitions and fund raisings. He was previously Senior Partner and lead Corporate Finance Partner at BDO Ireland between 1994 and COMPANY SECRETARY SIMON SMITH BSC (HONS) MSC ACIS (38) was appointed Company Secretary on 3 November An Associate of the Institute of Chartered Secretaries and Administrators he has previously held company secretarial positions at PartyGaming plc, Associated British Foods plc, BG Group plc and KPMG. 33

36 GOVERANCE - CORPORATE SOCIAL RESPONSIBILTY Corporate Social Responsibilty Corporate Social Responsibility Highlights As a global company, Tarsus Group is strongly committed to corporate social responsibility (CSR) to acting responsibly, operating sustainably and contributing to the communities in which we work and live. More details of our CSR Policy can be found on page 44. This is a summary of some of the key activities that our Corporate Social Responsibility Committee and Group employees have taken part in this year. Sustainability and environmental policies Tarsus is committed to ensuring its operations are as environmentally friendly as possible, and has a number of company-wide policies to achieve this, including; i) Keeping staff travel to a minimum and making active use of alternative means of communication (eg video conferencing etc) to reduce travel requirements and reduce the Group s overall carbon footprint where possible ii) Discouraging the printing of s and making information available online in addition to in print to reduce paper wastage. iii) Encouraging the development and use of Mobile Apps at our events, which contain all show data to reduce the volume of print event guides required. Corporate charity support: Events for Namuwongo The Group provides a funds-matching scheme for employees which means that any funds raised through activities such as sponsored runs or charity events by a Tarsus employee will be matched pound for pound by the Group, with all monies going to the employee s chosen charity. In total the Group made contributions of 21,652 during Three Peaks Challange The event raised 9,928 for Events for Namuwongo 34

37 GOVERANCE - CORPORATE SOCIAL RESPONSIBILTY Corporate charity support: Events for Namuwongo The Group s official charity is Events for Namuwongo. Namuwongo is a slum community on the edge of Kampala in Uganda that suffers from poverty, lack of sanitation and education and which has been ravaged by AIDS and neighbouring wars. Events for Namuwongo was set up by the events community to help provide long term support for the community including the provision of clean water and sanitation, health care and education services and facilities. To achieve this, the charity aims to raise 400,000 by the end of Douglas Emslie, Group Managing Director, is a member of the Board of Events for Namuwongo. In 2013, Tarsus participated in a number of fundraising activities for Events for Namuwongo. New drainage system in Namuwongo Douglas Emslie is a member of the Events for Namuwongo Board Old toilet block in Namuwongo New toilet block in Namuwongo Tarsus fund raising for Namuwongo will continue in